Taiwan’s TSMC, the world’s largest semiconductor consignment producer, has confirmed its plan to establish a semiconductor plant in Germany. This is the first time TSMC has built a semiconductor plant in Europe.
TSMC held a board meeting on the 8th (local time) and confirmed the proposal to build a semiconductor plant (Pep) in Dresden, a city in eastern Germany, Taiwanese media and Reuters reported.
The board of directors approved the investment plan for ESMC, the German subsidiary of TSMC, within a range not exceeding 3.49 billion euros. The plant plans to open in 2027 and produce 40,000 300mm wafers per month.
TSMC is expected to operate its German plant through a joint venture with auto parts maker Bosch, German and Dutch semiconductor companies Infineon and NXP. ESMC holds 70% of the stake, and each of the other three companies holds 10%.
According to German economic media Handelsbulat, the German government has decided to inject 5 billion euros in subsidies raised by climate funds into the construction of the factory. This grant must be finally approved by the European Commission.
This is the first time TSMC has built a semiconductor plant in Europe. TSMC is currently building plants in Kumamoto Prefecture in Japan and Arizona in the U.S.
“This TSMC investment will bring another global player in the semiconductor sector to Germany,” German Deputy Prime Minister and Minister of Economy and Climate Protection Robert Habeck said in a statement. “This shows that Germany is an attractive and competitive position.”
Earlier in June, Intel also signed a contract to build two semiconductor facilities in Magdeburg, Germany. This was mentioned as the largest foreign investment in German history. Deputy Prime Minister Habeck said at the time, “It is an important contribution to the growth of European industrial sovereignty.”
Germany’s move is part of the EU’s broader effort to build semiconductor production facilities within Europe to protect its supply chain, Deutsche Welle said. EU approves 43 billion euro grant plan to boost semiconductor production capacity by 2030.
According to Taiwanese media, TSMC also approved an investment plan to inject $4.5 billion into a plant under construction in Arizona.
TSMC planned to start operating the first process facility at its Arizona plant in 2024, produce 5nm (nanometer, 1 billionth of a meter) chips, and start operating the second process facility in 2026, but the plant is running about a year later than planned.
